Are high-risk tax claims subject to inspection before refund in Vietnam?

Are high-risk tax claims subject to inspection before refund in Vietnam?

Based on Article 73 of the 2019 Law on Tax Administration concerning the classification of tax dossiers as follows:

Classification of Tax Refund Dossiers

1. Tax refund dossiers are classified into those subject to pre-refund inspection and those eligible for a refund before inspection.

2. Dossiers subject to pre-refund inspection include:

a) Dossiers of taxpayers requesting a tax refund for the first time for each refund case as stipulated by tax law. If a taxpayer submits a tax refund dossier to the tax administration for the first time but is not eligible for a refund as per regulations, the subsequent refund request will still be considered a first-time request;

b) Dossiers of taxpayers requesting a refund within 2 years from the time of being sanctioned for tax evasion acts;

c) Dossiers of organizations dissolving, going bankrupt, terminating activities, selling, assigning, or transferring state-owned enterprises;

d) Tax refund dossiers classified as high tax risk according to the risk management classification in tax administration;

đ) Dossiers eligible for a refund before, but upon expiration of the deadline fixed in a formal notification by the tax authority, the taxpayer does not provide an explanation or supplement the tax refund dossier, or provides an explanation or supplement but cannot prove the declared tax amount is correct;

e) Tax refund dossiers concerning exports and imports not transacted via commercial banks or other credit institutions as prescribed by law;

g) Tax refund dossiers concerning exports and imports subject to pre-refund inspection according to the regulations of the Government of Vietnam.

3. Dossiers eligible for a refund before inspection are those of taxpayers not falling under the cases prescribed in Clause 2 of this Article.

4. The Minister of Finance provides detailed regulations on this Article.

According to these regulations, refund dossiers classified as high tax risk according to the risk management classification in tax administration are subject to pre-refund inspection.

As per these regulations, refund dossiers classified as high tax risk according to the risk management classification in tax administration subject to inspection before refund.

What is the time limit for processing a tax refund dossier in Vietnam?

According to Article 75 of the 2019 Law on Tax Administration, the time limit for processing tax refund dossiers is stipulated as follows:

- For dossiers eligible for a refund before inspection, within 6 working days from the date the tax authority issues a notification accepting the dossier and the deadline for processing the refund, the tax authority must decide to refund the taxpayer or notify the transfer of the taxpayer's dossier for pre-refund inspection if falling under cases specified in Clause 2, Article 73 of the 2019 Law on Tax Administration or notify the taxpayer of not approving the refund if the dossier does not meet refund conditions.

In case the information declared in the refund dossier differs from the management information of the tax authority, the tax authority must issue a written notice for the taxpayer to provide clarification or additional information. The time taken for clarification or additional information is not counted within the processing timeframe of the refund dossier.

- For dossiers subject to pre-refund inspection, no later than 40 days from the date the tax authority issues a written notice accepting the dossier and the deadline for processing the refund, the tax authority must decide to refund or not refund the taxpayer if the dossier does not meet refund conditions.

- Beyond the above time limits, if the tax refund decision issuance is delayed due to tax authority error, in addition to the refund amount, the tax authority must also pay interest at 0.03%/day on the refundable amount and the number of days delayed. The source of interest payment is drawn from the central budget as per state budgetary regulations.

Do high-risk tax claims subject to inspection before refund in Vietnam? (Image from the Internet)

Which authority has the power to decide on tax refunds in Vietnam?

Based on Article 76 of the 2019 Law on Tax Administration, the authority to decide on tax refunds is as follows:

- The Director General of the General Department of Taxation, the Head of the Provincial or Municipal Tax Department under central authority, decides on tax refunds according to the tax law.

- The head of the tax agency receiving excess payment refund dossiers decides on refunds in cases of excess payment according to this Law.

- The Director General of the General Department of Customs, the Head of the Department of Customs, or the Head of the Customs Sub-Department where the tax refund amount arises decides on tax refunds according to tax law.

- The Minister of Finance regulates the procedures for tax refunds.